This might be the answer:
Exxon Mobil Corp.'s decision to leave its U.S. natural-gas output untouched despite low commodity prices may push some smaller producers out of the business, force consolidation in the industry and make the oil company an even more powerful force in the oilpatch.This will be fun to watch.
The biggest U.S. natural-gas producer puzzled some analysts and investors Tuesday when during its earnings report, it said it had no plans to curtail its output despite that a glut has driven the price of the commodity to its lowest level in more than a decade. Other companies including Chesapeake Energy Corp., the second-largest U.S. natural-gas producer, recently have announced drilling cutbacks as natural-gas production in some areas becomes a money-losing business.
The Irving, Texas, company argued although it is doing its best to switch drilling to oil-rich areas, it still needs to keep drilling for natural gas to meet previously agreed-to contractual terms that let it retain expensive land leases. Raising some market observers' eyebrows, it also said drilling for natural gas in some areas is still profitable even at current prices.
Meanwhile, Navistar (a truck company) is partnering with Boone Pickens (a natural gas guy):
Navistar International Corp. has struck a partnership with oil and gas magnate T. Boone Pickens Jr. as part of a broad strategy to speed the shift of big rigs to natural gas.One almost gets the feeling the "big guys" have been meeting and formulating a strategy. XOM, T. Boone, and Navistar, just for starters.
The Lisle-based truck maker, which has been under pressure by activist investor Carl Icahn, will adapt its existing line of medium- and heavy-duty trucks to burn liquid natural gas. It will work with Clean Energy Fuels Corp., which will provide a national system of fueling stations for them. Mr. Pickens is founder, chairman and the largest shareholder of Seal Beach, Calif.-based Clean Energy.
“Natural gas has clearly emerged as the most realistic alternative fuel option for the trucking industry,” Navistar Chairman and CEO Dan Ustian said in a statement.
Clean Energy plans to have 150 stations, many of them located in Pilot-Flying J Travel centers, with 70 stations open by the end of the year.
Navistar makes the announcement as the Environmental Protection Agency prepares to fine it $1,900 per engine later this month for failing to meet federal emissions regulations. The company has been using credits to comply with the standards but could run out by the end of the month, according to a report in Transport Topics.
